GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair performed a new fall to the ascending trend line, but this time they also closed below it. Thus, the chances of a fall in the pair's quotes have slightly increased. Nevertheless, the "bullish" mood of traders persists. Yesterday's information background for the pound/dollar pair was very weak. The UK also didn't have a lot of important information. A couple of reports did not affect the movement of the Briton in any way. Thus, bull traders have twice failed to overcome the important level of 1.4216, which prevents further growth of the UK currency.
On the one hand, the British and the European have been growing for a very long time, which is very clearly visible on the daily chart. On the other hand, bull traders need new reasons to continue buying. And these grounds are now few. Let me remind you that the Bank of England has made it clear to the markets that it will not either wind down the bond repurchase program or raise the key rate in the near future. Any changes will be possible not earlier than next year. Recently, traders have received a minimal amount of news related to Brexit. At least, there were no new statements on this matter from either side. Let me remind you that the trade agreement between Brussels and London does not cover the services sector. During the first months of life on different sides of the barricades between the EU and Britain, there have been several controversial and conflicting moments. But there is no essential news at this time, so traders continue to push the pound/dollar pair up by inertia, but at any time, a close can be made under the trend line on the daily chart.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair performed a new reversal in favor of the US currency after forming a bearish divergence at the CCI indicator. But at the moment, the growth process has already resumed, and the quotes again tend to the corrective level of 0.0% (1.4240). Closing the pair's rate above this level will favor continuing the growth of the British dollar.
GBP/USD – Daily.
On the daily chart, everything still rests on the trend line, along which the movement of quotes of the pound/dollar pair continues. Closing quotes under this line will work in favor of the US dollar and start falling in the direction of the corrective level of 100.0% (1.3513). The growth process will continue at the corrective level of 161.8% (1.4812) until this happens.
GBP/USD – Weekly.
The pound/dollar pair completed a close over the second downward trend line on the weekly chart. Thus, the chances of long-term growth of the pound remain.
Overview of fundamentals:
On Tuesday, there were no important events in either the UK or America that could attract traders' attention.
News calendar for the United States and the United Kingdom:
On Wednesday, the calendars of economic events in the UK and the US are again empty. There will be no background information today.
COT (Commitments of Traders) report:
The COT report of May 18 on the British dollar showed that the "bullish" mood of speculators became slightly weaker, in contrast to the report of a week ago. Thus, in general, it is noticeable that speculators continue to increase long contracts for the British. The total number of long contracts in the "Non-commercial" category of traders exceeds the number of short contracts by two times. Thus, the sentiment remains "bullish," and the latest COT reports have not shown any drastic changes in this. I will also note the extremely low activity of all categories of traders, as a total of only 6.5 thousand contracts were opened during the reporting week.
GBP/USD forecast and recommendations for traders:
It was recommended to buy the British dollar with the targets of 1.4216 and 1.4240, as a rebound from the trend line on the hourly chart was made. At this time, the movement is very unstable. I recommend buying if the pair rebounds from the trend line on the daily chart. I recommend selling the pound if a close is made under the ascending trend line on the daily chart with a target of 1.3513.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency, not for speculative profit, but to support current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.